Within its annual wrap-up of the country’s annual property performance, CoreLogic’s Best of the Best Report for 2023 reveals that Perth accounted for a whopping eight of the top 10 spots for the strongest growth in house values across capital city markets.

Drilling down into the minutiae of Perth’s performance, CoreLogic data reveals Brookdale, Armadale and Hilbert all jumped more than 30.0% annually and median house values sub-$550,000.

Here’s a walk-through of the highlights from CoreLogic’s Best of the Best Report for 2023.

Unit markets: Perth (5), Brisbane (4) and Adelaide (1) took out the top 10 for largest gains, with units in Brisbane’s Slacks Creek surging 27.4% over the year, with seven of the top 10 recording median values under $400,000.

Weakest capital city: On the flipside, the weakest capital city house suburbs featured Hobart’s upper end, with North Hobart and Taroona down 13.9% and 13.8% respectively, while the top 10 worst-performing unit markets were more diverse, spanning Hobart, Darwin, Melbourne and Canberra.

Regional Australia: Delving into regional Australia, CoreLogic data highlights NSW’s Tralee as the top-performing house market with 34.2% capital growth, while Qld’s Emerald saw the highest value growth for units at 20.9%.

Meantime, the dubious accolade of worst performing regional house market went to Rochester in Victoria where values were down 26.0%, while Mudgee in NSW recorded an 11.4% in unit value over the past year.

Top ten sales nationally: The national top 10 sales for the year featured Sydney’s usual Eastern Suburbs cohort, Bellevue Hill and Vaucluse, along with Melbourne’s Hawthorn and Toorak, plus Coopers Shoot in the Byron Shire of the Northern Rivers region.

Nationally, Mosman in Sydney’s Lower North Shore recorded the highest total value of house sales over the 12 months to September at $1.462bn, with total unit sales in Surfers Paradise reaching $1.175bn.

Rent growth: Nationally, Kensington in Sydney’s eastern suburbs recorded the highest house rent growth in the year to November, up 24.9%.

In the unit segment, Lakemba in Sydney’s Inner South West saw rents soar 28.1%, closely followed by Wiley Park up 28.0%.

WA’s Kambalda East (15.5%) and Boulder (12.0%) recorded the highest gross rental yields nationally for houses and units respectively.

Combined with an expectation that interest rates could hold higher for longer, households are likely to see their budgets further stretched, and more households may fall into acute financial stress

Outlook for 2024

Based on telltale signs that high housing costs are now biting, CoreLogic’s head of research, Eliza Owen expects 2024 to be far more subdued for capital growth. Early signs that market conditions are weakening, notes Owen, are having the greatest impact on the upper end of Australia’s housing market.

Owen points to the pace of capital growth which has been easing gradually from June and most notably through November.

Transaction volumes nationally have declined by an estimated 1.7% over November as well, which is particularly noteworthy given that sales volumes typically increase from October to November.

These conditions have coincided with a decline in the combined capitals clearance rate since June, which averaged just 61.7% through November.

“The RBA is forecasting a rise in the unemployment rate, we’re seeing a subdued pace of growth for GDP, slowing growth in disposable household income and the lowest household saving rate since the GFC at just 1.1%,” said Owen.

“Combined with an expectation that interest rates could hold higher for longer, households are likely to see their budgets further stretched, and more households may fall into acute financial stress.”

On rents, Owen expects rental growth to continue to slow, but may not decline nationally.

Key factors Owen expects to support a further deceleration in rental growth include:

  • Net overseas migration may start to normalise as the ‘catch-up’ from overseas arrivals eases and departures increase through 2024.
  • Stretched rental affordability is likely to see a gradual restructuring of rental demand.
  • A projected normalisation in the rate of investment sales should add to the supply of rentals in the coming months.
  • As more dwellings associated with the ‘HomeBuilder’ stimulus move to completion, we could see rental demand ease as tenants inhabit their newly built homes.

“Unfortunately for renters, a slowdown in the rate of rent increases does not necessarily mean rents will fall,” Owen said.

“Some markets such as Canberra and Hobart have seen distinct falls in rent values through 2023, but even these declines are small relative to the upswing in rents.”